Workers

1
Workers Compensation Employers Liability
Insurance

• Types of Injuries
• Illinois WC Benefits
• Workers Comp and Employers Liability Policy
• WC Pricing Environments
• Rating Plans for WC Policies
• Industry Trends

2
Types of Injuries

• Fatal
• Permanent Total
• Permanent Partial
• Temporary Total
• Medical Only

3
Illinois WC Benefits

• State Average Weekly Wage (SAWW) 747.48
• Survivors Benefits
• Burial Benefit 4,200
• 66 2/3 of AWW w/ COLA
• Min Weekly Benefit Lesser of 373.74 or AWW
• Max Weekly Benefit 996.64
• Max Lifetime Greater of 250,000 or 20yrs
• Remarriage Award 2yrs Lump Sum w/o children

4
Illinois WC Benefits (continued)

• Permanent Total Disability
• 66 2/3 of AWW w/ COLA
• Min Weekly Benefit Lesser of 373.74 or AWW
• Max Weekly Benefit 996.64
• Max Lifetime Unlimited
• Temporary Total Disability
• 66 2/3 of AWW
• 3 Workday waiting period/14 day retroactive
  period
• Min Weekly Benefit Lesser of 113.40 or AWW
• Max Weekly Benefit 996.64
• Assumes Married, 2 children

5
Illinois WC Benefits (continued)

• Permanent Partial Disability
• 60 of AWW
• Min Weekly Benefit Lesser of 88.90 or AWW
• Max Weekly Benefit 541.23 or 996.64
• Duration
• Non-Schedule of disability 500 wks
• Schedule Thumb 70 wks
• Hand 190 wks
• Foot 155 wks
• Leg 200 wks
• Hearing Both Ears 200 wks
• Assumes Married, 2 children
• 996.64 paid if amputation or enucleation occurs

6
Illinois WC Benefits Example

• An employee is injured at work while performing
  his job duties. His medical bills are 400. His
  average weekly wage is 1,540. He is totally
  disabled for 13 calendar days (9 workdays).
• Assuming the injury is covered by workers
  compensation law, how much will paid in benefits?

7
Illinois WC Benefits Example

• 66 2/3 of his AWW 1,026.67
• Max benefit for TTD 996.64
• He will receive benefits for 6 workdays (9
  workdays minus 3 day waiting period.
• 1.2 weeks 996.64/week 1,195.68
• 400 for medical expenses
• TOTAL 1,595.68

8
Workers Compensation and Employers Liability
Insurance Policy

• Information Page
• General Section
• Part One - Workers Compensation Insurance
• Part Two - Employers Liability Insurance
• Part Three - Other States Insurance
• Part Four - Your Duties if Injury Occurs
• Part Five - Premium
• Part Six - Conditions

9
Information Page

• 1 Describes insured
• 2 Shows coverage period
• 3 Summarizes coverages
• 4 Premium estimate
• Classification, estimated payroll, rate

10
General Section

• The Policy
• Who is Insured
• Workers Compensation Law
• State
• Locations

11
Part One - Workers Compensation

• A. How This Insurance Applies
• Bodily injury by accident must occur during the
  policy period
• Bodily injury by disease must be caused or
  aggravated by conditions of your employment. The
  employees last day of exposure to the conditions
  causing or aggravating such bodily injury must
  occur during the policy period.
• B. We Will Pay
• Benefits required by workers compensation law
• C. We Will Defend
• D. We Will Also Pay
• Insureds expenses
• Bonds and interest on judgments

12
What is Workers Compensation Law?

• What WC Law is
• WC Law in each state listed in Item 3A
• Any amendments to the law during the policy
  period
• What WC Law is not
• Federal WC Law
• Federal occupational disease law
• Any law that provides nonoccupational disability
  benefits

13
Part One - continued

• E. Other Insurance
• F. Payments You Must Make
• Payments in excess of regular benefits required
  because
• Serious or willful misconduct
• Hiring an employee in violation of law
• Failure to comply with safety regulations
• Discharge, coerce or discriminate against
  employee
• G. Recovery From Others
• H. Statutory Provisions
• Your default or the bankruptcy or insolvency of
  you or your estate will not relieve us of our
  duties under this insurance after an injury
  occurs.

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Part 2 -Employer Liability Insurance

• Need for coverage
• Third-party-over suits
• Care and loss of services
• Consequential bodily injury
• Dual capacity
• Exclusions
• Outside the US or Canada
• Liability assumed under contract
• Punitive damages for illegally employed person
• Bodily injury intentionally caused by insured
• Damages from employment practices

15
Part 2 -Employer Liability Insurance

• Exclusions (Continued)
• USLH Extensions
• FELA
• Injuries to members of the crew of any vessel
• Limits of Liability
• Basic Limits
• 100,000 BI by Accident, Each Accident
• 100,000 BI by Disease, Each Employee
• 500,000 BI by Disease, Policy Limit
• Increased limits can be obtained for additional
  premium
• NY Unlimited EL Coverage

16
WC and Employers Liability Policy

• Part 3 - Other States Insurance
• Part 4 - Duties If Injury Occurs
• Part 5 - Premium
• Recordkeeping requirements
• Adjusted premiums
• Part 6 - Conditions
• Inspection
• Assignment
• Cancellation

17
Pricing Environments

• Administrated Pricing
• Rates are filed by Rating Bureau
• Carriers may be permitted to deviate from rates
• Competitive Pricing
• Rating Bureau files Loss Costs
• Carriers load in their own expenses loss
  experience adjustments

18
Rating Plans for WC Policies

• Guaranteed Cost
• Loss Sensitive
• Retrospectively Rated Policies
• Large Deductible Policies

19
Components of a WC Premium
Manual Premium (Exposure Rate) Employers
Liability Increased Limit Experience
Credit/Debit Schedule Credit/Debit Contractors
Classification Premium Adjustment Program
(CCPAP) Balance to Minimum Premium Premium
Discount Expense Constant
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Retrospectively Rated Policies

• Final Premium Determined by Insureds Losses and
  insurers expenses
• Losses are valued _at_ 18 months and every 12 months
  afterwards
• Optional Min and Max Premium
• Optional Per Loss Capping

21
Large Deductible Policies

• Deductibles of 100,000 per claim or greater
• Policy aggregates can be available
• Insurer pays first then recovers from insured
• Insurer or TPA handles claims
• Cash Flow Advantages
• Reduced Tax Liability

22
Industry Trends

• Flat Loss Costs
• Frequency Decrease
• Hardening of Insurance Market
• Terrorism Exposure
• Assault on Exclusive Remedy
• Future of California WC???

23
Industry Accident Year Results